Converting Rice May Be Easier Than Converting To A Flexible Purpose Corporation
The process for converting rice sounds like some medieval torture. Rice is soaked, steamed under pressure, and then dried. While not pleasant, conversion can, and does, occur. The same may not be true for converting a corporation into a flexible purpose corporation. Flexible purpose corporations are corporations formed under Title I, Division 1.5 of the California Corporations Code, Section 2500 et Read more...
California Corporate Contribution Initiative Cleared For Circulation
Opponents of the Supreme Court’s decision in Citizens United v. Federal Election Commission, 130 S. Ct. 876, 558 US 50, 175 L. Ed. 2d 753 (2010) are fighting back in California on numerous fronts. Last month, California State Senator Noreen Evans introduced a bill, SB 982, to require corporations to issue a report on planned political spending as well as expenditures Read more...
Is A Director An “Official At The Highest Level Of Corporate Management”?
Liberty Mutual Ins. Co. v. Superior Court, 10 Cal. App. 4th 1282 (1992) involved an attempt by a plaintiff to depose the president of an insurance company. In response, the First District Court of Appeal adopted what is known as the “apex doctrine” – holding: when a plaintiff seeks to depose a corporate president or other official at the highest level of Read more...
Forming A Benefit Or Flexible Purpose Corporation? Some Pitfalls To Avoid
In previous blogs, I’ve noted the appearance of two new types of California corporations – the flexible purpose corporation and the benefit corporation. Because the laws creating both of these forms took effect on January 1, organizers have been forced to draft on a tabula rasa. Here are a few drafting pitfalls that have come to my attention. Benefit Corporations Section 14602 of Read more...
Initiative Seeks To Dehumanize Corporations In California
Are corporations “persons”? The California Corporations Code answers this question quite directly in Section 18 which defines “person” as including corporations and natural persons. The Corporate Securities Law of 1968 goes even further – defining “person” to mean an individual, a corporation, a partnership, a limited liability company, a joint venture, an association, a joint stock company, a trust, an unincorporated organization, Read more...
Louis D. Brandeis Takes On Section 310
Before being named to the U.S. Supreme Court, Justice Louis D. Brandeis wrote an influential series of articles for Harpers Weekly magazine. Eventually, these articles were collected and published under the title “Other People’s Money–and How the Bankers Use It”. In Chapter III, Brandeis attacked the practice of interlocking directorates with the claim that it “offends laws human and divine.” Brandeis Read more...
One-Size-Fits-All Policy Is A Misfit
Today, Forbes.com ran my Op/Ed on ISS’ recent decision to adopt a one-size-fits-all approach to recommendations on shareholder proposals with respect to political spending disclosures.
Do You Have The Correct Authorized Number Of Directors?
I frequently come across corporations with the wrong number of authorized directors. California, unlike other states, has some very precise rules and these frequently seem to be missed. The Bylaws of many California corporations establish a minimum and maximum number of directors and permit the board to fix the exact number within that range. For example, the Bylaws might provide Read more...
Bill Seeks To Mandate Corporate Political Disclosures
The fallout from the U.S. Supreme Court’s decision in Citizens United v. Federal Election Com’n, 130 S. Ct. 876 (2010) continues. Earlier this week, California State Senator Noreen Evans introduced a bill, SB 982, to require corporations to issue a report on planned political spending as well as expenditures for the previous fiscal year. The report must include the following: Read more...
There’s Something About Section 800 And ISS Adds Panelist
What’s So Different About Section 800? California Corporations Code Section 800 governs derivative lawsuits. Yesterday, I wrote about the fact that the California legislature has made Section 800 expressly applicable to foreign corporations (as defined in Section 171). Is this an academic point or can it matter? One key difference may be that Section 800(c) allows the corporation or any Read more...
